Frank N. Darras: CUNA Mutual Group Slapped With $6 Million Punishment Verdict for Bad Faith Disability Claim Handling

Disability Insurance – What You Need To Know

June 29, 2009

Teri Powell, a former Spanish teacher and citizen of South Dakota purchased a disability insurance policy from CUNA Mutual Group and CUNA Mutual Life Insurance Company (defendants) on a home equity loan of $50K from her credit union. Court documents state that "upon becoming disabled, Powell applied for benefits under her policy and was told by the defendants that she applied too late for her claim to be considered on its merits."

CUNA denied her disability benefits on the ground that Powell applied too late for her claim to be considered, yet the defendants knew the claim was not late or recklessly disregarded the policy and South Dakota state law (both established the claim was not late), says Frank N. Darras, America's top lawyer for the disabled and the elderly. See www.darrasnews.com.

"Disabled and senior citizens are easy targets for insurance companies practicing delay and wrongful denial strategies. Big insurance knows the disabled can't fight long and surrender quickly if they are constantly challenged to produce and re-produce the same claim documents over and over again. Sick insured's don't have the strength, the fortitude and simply do not live long enough to get what they richly paid for and rightfully deserve," says Darras.

Case in point: In the Powell lawsuit, the allegations against CUNA included misrepresenting to Ms. Powell the definition of disability, misrepresenting not receiving communications from Powell's attorney, and denying her benefits after her first year of disability based on a contrary definition of disability in her policy. A Federal jury found CUNA lacked a reasonable basis for denial. CUNA was determined to have acted with malice, oppression and deliberate and reckless disregard for Powell's disability rights.

Like many other terminally ill disabled plaintiffs, Powell died before her trial against CUNA ever began. Could this happen to you and your family?

Whether you purchase supplemental disability insurance through your credit card, mortgage disability insurance or home-equity line, be sure you read and understand the fine print and get competent, experienced legal advice.

Disability Insurance is a smart move, considering one in five Americans becomes disabled for a year or more. Remember, doing your homework and choosing a reputable company with stellar claims paying practices is good business and may save you and your family in the long run, says Darras.

"A disability policy is no good if you have to fight your carrier to honor what they sold you. By the time you get to court, your credit is ruined, your life is in shambles and you're fighting a billion dollar insurance company," says Darras.